Sindh rejects any attempt to alter natural gas pricing formula

Javed MirzaWeb Editor

17th Aug, 2021. 08:36 pm
05:09 (PST)22 Sep
08:36 (PST)17 Aug

KARACHI: The government of Sindh has rejected any attempt to alter the present arrangement of Weighted Average Cost of Gas (WACOG) for natural gas produced in the country.

“We believe that any attempt to add RLNG [regasified liquefied natural gas] in the present WACOG prices with any ring-fenced options with Tier-I consumers of indigenous natural gas would phenomenally elevate the gas prices upward, which is detrimental to and adversely impact domestic, commercial, industrial and CNG sector consumers in Sindh,” Sindh Energy Minister Imtiaz Sheikh said in a letter to Federal Energy Minister Hammad Azhar.

The Sindh minister requested the federal government to refrain from adding RLNG price with the present WACOG pricing mechanism of indigenous natural gas.

As per the existing practice, RLNG consumers (i.e. Tier-II) would continue to be ring fenced and kept separate from the regular consumers, i.e. Tier-I, utilising indigenous gas under WACOG.

“[The] government of Sindh demands that the constitutional rights of the people of Sindh for priority over the utilisation of natural gas from the wellheads located in the province will be safeguarded in letter and spirit.”

The minister also expressed the hope that the natural gas allocation quota of Sindh in the Sui Southern Gas Company (SSGC) system will be increased so that the people of the province could reap the economic benefits of indigenous natural gas.

Sheikh urged Azhar to advise SSGC to complete all gasification schemes, which are pending since 2010 and whose construction cost had already been paid by the provincial government.

In pursuance of the Article 172 (3) of the Constitution, the Sindh minister demanded the due representation of the province in the Oil and Gas Regulatory Authority (Ogra), Pakistan Petroleum Limited (PPL), Hydrocarbon Development Institute of Pakistan (HDIP), Pakistan State Oil (PSO), refineries, etc.

“Moreover, [the] provincial governments’ right to equally manage the local oil and gas sector and ‘[the] issuance of its own gas management and allocation policy should be acknowledged,” Sheikh added.

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